Once a suburb of the British capital, Shoreditch has become one of the most up-and-coming business districts in London. The dot.com bubble brought renovated interest in office space in this area, particularly from prospective occupiers in the IT, media, digital, and creative sectors.
One of the keys to Shoreditch's success as an office location is its privileged position. This neighbourhood enjoys close proximity to the City of London and to one of the world's most vibrant technology hubs - London's Tech City. Olympic Park (in East London) is one of the city's most important transportation hubs and has direct links to St. Pancras International and to London City airport. University College London has a campus nearby, where groundbreaking start-up incubators have been part and parcel of East London's unstoppable rise as one of Europe's leading innovation hubs.
Due to all of the above, it is understandable that Shoreditch is an appealing destination for tenants looking for office space. If you are considering relocating or setting up a business in this area of London, we recommend that you read through our guide to the office space market in Shoreditch.
An overview of the office space market in Shoreditch
Over the past few years, office floor space in Shoreditch has become an affordable alternative to space in the City, the West End, and MidTown. Overall, Shoreditch offers some of the lowest priced offices in the capital. Although increases in rental values have been a consistent trend across London, many market analysts still point at Shoreditch as one of the most cost-effective office locations. For example, a report by Carter Jonas showed that rental values in Shoreditch have increased by 13.3 per cent since 2013. Currently, average rents in this area range between £42.5 and £55 per square foot. Rents are only lower in the South Bank, Hammersmith, and the Docklands. And yet, the area has a great potential in terms of rental growth. Real estate firm JLL has affirmed that within the next five years, the cost of office floor space in Shoreditch will skyrocket due to two main factors: the arrival of Crossrail services to the area and the completion of several speculative developments, which will attract more tenants to the area with state-of-the-art Grade A office facilities. This can be considered good news for investors, as in the near future the Shoreditch office market is set to be particularly buoyant for landlords.
In terms of the rental market, some of the most sought-after office units in Shoreditch are located in The Bower, a new mixed use development that will offer nearly 290,000 square feet of Grade A office space between 2015 and 2016. Within The Bower, the Warehouse building will be particularly appealing to occupiers in the media and creative industries, as bespoke media office space will be available across 9 floors in units ranging between 7,685 and 19,676 square feet. Office occupiers looking for smaller units should consider the double-height offices that will become available at The Tower (also within The Bower) in 2016.
Existing office stock in Shoreditch comprises a variety of redeveloped industrial units, serviced office space, and loft-style offices. The areas around Leonard Street and Great Eastern Street are known for their 19th-century warehouses, which have been converted into office units popular with media and creative firms. Typical costs for this type of office space are in the region of £1,800 per calendar month for small units (650 sq ft). Larger units (1,000 square feet and up) command rents of £3,900/month. Alternatively, refurbished office space is available in and around Rivington Street and Bath Place, where floor space costs range between £32.5 and £42.5 per square foot (Grade A) and between £22.5 and £30 per square foot for Grade B space.
Serviced office space is a good alternative for start-ups looking to establish themselves in Shoreditch, as this solution offers flexible licence terms and premises are already furnished and equipped with all the necessary telecommunications infrastructure. The vast majority of serviced office space in Shoreditch can accommodate between 20 and 40 people and is available in Hoxton Square, Shoreditch High Street, Penn Street, Southgate Road, Corsham Street, and Charlotte Road. Workstations in these areas average £500 per desk for mid-range space. The cost per workstation rises in properties that are closer to Liverpool Street. For instance, serviced office space in Curtain Road commands rates of £750 per workstation.
An even cheaper alternative consists of the various shared/co-working spaces available throughout Shoreditch. New desk space of this kind costs anything between £250 and £300 per calendar month, and in many the cases these prices are inclusive of utility bills. Some areas worth exploring include Paul Street, Clifton Street, and Bonhill Street.
Sources:
http://www.carterjonas.co.uk/news-and-events/news-and-press-releases/jan-14/price-increase-london-office-market.aspx
http://www.jll.co.uk/united-kingdom/en-gb/news/1689/jll-london-office-market
http://www.theboweroldst.com/
